What is a Nidhi Company?

Nidhi Company is one of the categories of a Non-Banking Financial Company (NBFC) that does not require any of the Reserve Bank licenses. It is recognized under the section 406 of the Companies Act 2013. The Nidhi Companyis very easy and cheap to form in order to register. They basically borrow and lend money to their members. They are also called Benefit Fund, Mutual Benefit Fund.

Nidhi Company

In a Nidhi company, it is to be seen that a minimum of 3 directors and 7 shareholders are required to start a limited company incorporation process.

Public Limited Companies are those types of companies where minimum number of members is seven and there is no cap on the maximum number of members. A public limited company has most of the characteristics of a private limited company. A public limited company has all the advantages of private limited company and the ability to have any number of members, ease in transfer of shareholding and more transparency. Identifying marks of a public limited company are name, number of members, shares, formation, management, directors and meetings, etc.,

This form of business is suitable for large scale of business where the capital requirement is very high and the company is willing to obtain money from the public at large